OrganiGram, a player in Canada’s fledgling cannabis industry, is optimistic that demand will stay robust during COVID-19, partly because consumers could be looking for affordable types of enjoyment and entertainment at home.

In March, OrganiGram saw an “uptick in sell-through” and orders, as it aimed to serve customers through brick-and-mortar channels, click-and-collect solutions, and online delivery as individual regions allow.

“The demand is there,” Gregory Engel, chief executive officer of OrganiGram – which owns brands like Edison and Trailblazer – said on a conference call with investors. (For more, read WARC’s in-depth report: What does COVID-19 mean for the fledgling cannabis industry? Insights from OrganiGram.)

Paolo De Luca, OrganiGram’s chief strategy officer, further suggested that a “once-in-a-lifetime quarter in terms of the uncertainty” surrounds the coronavirus, as it prompted an unusual degree of “pantry loading” as shoppers were worried that cannabis stores might close.

“We’re monitoring [consumer behavior]. We’re trying to see what’s happening there,” said De Luca. “That’s all to be determined, and we’re going to obviously respond in whichever way we think is best to take advantage of the opportunities that may present themselves as a result of that.”

A case in point: many cannabis buyers who previously made illegal purchases are entering the mainstream. “We do see some positive anecdotes,” De Luca said.

For example, people are actually shifting to the legal market now because they don’t want to interact with their black-market dealer and they don’t want to meet the person physically.”

Engel flagged up other factors that “support increased consumption [of cannabis] even in light of an economic downturn” induced by the coronavirus.

One is affordability: “As consumers pare back spending on higher ticket items such as dining out and travel, cannabis is relatively less expensive and still provides a recreational experience,” Engel said.

Restricted opportunities for other modes in expenditure could also boost OrganiGram. “With limited availability for spending their entertainment dollars, I think certainly demand for cannabis continues to be strong,” Engel added.

“Stay-at-home and physical-distancing directives offer more opportunities to consume cannabis in private settings, which is what our own market research indicates is to be expected – particularly for edibles.”

Sourced from WARC





Sourced from WARC